Carbon swap bank to beat climate change

Jan 06, 2011

Australian researchers have suggested that nations should abandon the concept of carbon emissions trading in favor of a carbon swap bank that might lead to genuine reductions in the amount of carbon dioxide greenhouse gas entering the atmosphere and so provide a mechanism for reducing climate change. Details of the carbon swap bank are outlined in the journal Interdisciplinary Environmental Review.

Carbon emissions trading was to be the economic environmental solution to climate change. The original impetus of the Copenhagen Treaty in 2010 was to mitigate rising global average temperature by allowing nations that reduced their carbon emissions to trade with other nations and so motivate all nations to find ways of cutting pollution. The idea for an emission trading scheme first emerged in the 1960s in the USA. "Cap and trade" was essentially an invention of economists, and in particular, Canadian economist JH Dales in 1968. The first such cap-and-trade system was launched as part of the US Acid Rain Program in Title IV of the 1990 Clean Air Act but similar schemes have been mooted in the face of global warming.

Emissions trading became part of the Kyoto Protocol through the efforts of the Clinton Administration. Its success in reducing sulfur dioxide emissions and so reducing acid rain was seen as successful and inexpensive. The international adoption of cap-and-trade followed from the notion that, "We've found an effective tool, domestically, for controlling emissions, and let's try it internationally."

Unfortunately, economic solutions to scientific and engineering problems rarely succeed especially once politicians become involved. Various proposed bills in the USA and Australia faltered because of agricultural issues and a failure to force those industries that produce the greatest tonnage of carbon dioxide pollution to alter their technologies. Moreover, carbon trading became nothing more than a financial vehicle with excessive derivatives, an uncontrolled offset market, and distortion of permits and taxes.

According to Carolyn Currie of Public Private Sector Partnerships, in Sydney, Australia, a carbon swap bank would allow direct deposits of sequestered carbon to be added and withdrawals of emission rights to be made. The process would not work like an investment futures market but would be facilitated by direct swap arrangements between a supplier of carbon sequestering technologies and methods, and those of the carbon polluter.

This approach gets around some of the major obstacles to carbon trading, namely the accurate measurement of a nation's emissions and the regulation and enforcement of emissions controls internationally. More troublesome is the fact that emissions trading is not incentive compatible and so can result in perverse incentives whereby a polluting firm given emission permits has no incentive to reduce emissions further because future emissions permits might then be restricted. Similarly, regions, such as the European Union, could protect the industries within member states by allocating permits to reduce international competition from outside such a region.

There are five main advantages to a carbon swap bank over other carbon emission controls, according to Currie:

the macroeconomic significance of avoiding the free market flaws of volatility in price

mitigation of the uncertainty that an emissions trading scheme will actually induce significant changes in technology

the likelihood that changes will not be confined to the domestic economies of developed nations

the cost of a permit may be significantly higher than carbon swap arrangements when corruption of the permit process and the profiteering evident in the EU are taken into account

changes towards sequestration and emissions reduction can be identified and monitored and progress to lower carbon cap nationally assessed by listing all specific projects aimed to sequester carbon and reduce emissions.

While developed nations are now baulking at the implementation of carbon emissions trading schemes, a government could easily experiment with a carbon swap bank to benefit, for instance, its forestry and agricultural sectors, while reducing its emissions, based on the concept of increasing productivity in the sequestering sector, while preserving non-renewable resources for future generations; no international agreements would be needed and there would be no detrimental effect on national industry or competitiveness, and no potential for financial wizards to embroil carbon emissions in their vicious circle of boom and bust, concludes Currie.

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User comments : 5

The CO2 crackpots keep coming out of the woodwork. They will do anything to avoid an honest days work.you can dress up a pig but it's still a pig.We are on to you and you will be defeated.It's NOT CO2 that's the problem it warmists endlessly trying to pull another CARBON fast one!

@ted208 (alias: trailer-park-trash in my circles) says "The CO2 crackpots keep coming out of the woodworks.". I guess you are an expert at knowing what work is.

So; since me an my crew are carrying the torch tonight; what part of chemistry did you miss in high school? You are on to me? I'm just a scientist. I'm just a person that cares. I want you to know that CO2 is a major environmental problem that will kill earth if you don't get off your deniest butt and solve this issue.

So; what is your political motive for being a global-warming denier? Stupidity?

I want you to know that CO2 is a major environmental problem that will kill earth...

Pseudoscientific hype...

We could not emit enough to kill earth if we burnt every organic fuel on surface of the planet. We might get the amount of atmospheric CO2 to go up to as high as a maximum of 0.05 percent (it is between 0.03 and 0.04 percent now), and I say 'might' loosely.

We may (same with 'may' as 'might' above) alter the environment in one way or another but we certainly will not kill the planet with CO2. The planet did fine with CO2 in the 1000s ppm. It might get warmer and less comfortable for some but life will continue on.

Now, dumping toxics into the ocean...that is another matter. We actually could kill life on the planet that way. Kill photosynthetic life in the sea and watch oxygen levels fall substantially planetwide.

Howhot, you are an extremist and rude. If you really cared, you would read more from sites like NASA and NOAA, in addition to the Greenpeace and Siera Club sites. Yes, I read those sites and I listen to NPR radio. I TRY TO GET THE FULL STORY; You do not. You are a jar full of unyielding opinions and emotion rather than being an empty jar, ready to accept information and views outside your daily experience

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